3 Remuneration structure and remuneration in the 2024 financial year

3.2 Group Executive Committee

To determine the amount of remuneration of the Group Executive Committee, salaries are periodically reviewed through an external study, which takes into account and compares similar listed Swiss companies in the machine manufacturing industry. Individual responsibility and experience of the members of the Group Executive Committee is also taken into account. No external consultants are involved in setting the remuneration structures.

Remuneration types

CEO

RC1

BoD2

Base salary of the CEO

proposes

approves

Base salary for other members of Group Executive Committee

proposes

reviews

approves

Definition of targets for performance-related components of the Group Executive Committee

proposes

approves

Definition of the CEO’s individual targets

proposes

approves

Definition of individual targets for the other members of the Group Executive Committee

proposes

checks

approves

1RC = Remuneration Committee

2BoD = Board of Directors

The maximum total remuneration of the Group Executive Committee for the 2026 financial year will be presented for approval at the 2025 Annual General Meeting.

The remuneration of the Group Executive Committee is defined in a regulation adopted by the Board of Directors. It comprises the following components:

  • Base salary
  • Variable remuneration: Rieter short-term incentive (RSTI)
  • Share-based remuneration: Rieter long-term incentive (RLTI)
  • Pension and social benefit contributions
  • Expense allowance

Package

Tool

Purpose

Plan/performance period

Key performance figures 2024

Base salary

Annual base salary

Monthly cash payment

Remuneration for role

Variable remuneration Short-term incentive (RSTI)

50% variable remuneration of RSTI

Annual variable cash remuneration

Performance-related remuneration

One-year performance period

60–100% EBIT b.r.a.i. and free cash conversion ratio 0–40% profitability of the divisions

50% share-based remuneration (RLTI)

Restricted shares at a reduced subscription price

Performance-related remuneration, alignment with shareholder interests

One-year performance period Three-year vesting period for shares

60–100% EBIT b.r.a.i. and free cash conversion ratio 0–40% profitability of the divisions

Pension and social benefit contributions

Retirement provision

Rivora Sammelstiftung

Statutory and regulatory pension and social contributions and employee contributions for accident and illness

Expense allowance

Expense allowance

Expense allowance

Representation costs

The following underlying key figures

  • Earnings before interest and taxes (EBIT) before restructuring expenses and impairment (EBIT b.r.a.i. of the Group)
  • Free cash flow divided by net profit (free cash flow conversion ratio of the Group)
  • Profitability of the divisions

and their weighting reflect the Rieter Group’s focus on sustainable profitability, equity ratio and liquidity security.

Remuneration model of the Group Executive Committee

Base salary

The base salary for members of Group Executive Committee consists of a salary paid monthly. All members of the Group Executive Committee have a Swiss employment contract. The employer covers the statutory and regulatory pension and social contributions, including employee contributions for accident and illness. Members of the Group Executive Committee receive a lump-sum expense allowance for representation costs in accordance with the expense guidelines approved by the tax authorities.

Variable remuneration

The members of the Group Executive Committee receive variable remuneration based on the achievement of specific performance targets. These performance targets may, in accordance with Article 28 of the Articles of Association, include financial, strategic and/or personal targets, taking into account the function and level of responsibility of the recipient.

The target value of the variable remuneration is 100 percent of the base salary. Provided that the financial, strategic and/or personal targets are met, the members of the Group Executive Committee are entitled to a variable remuneration of a maximum of 150 percent of the base salary. The amount is calculated based on the weighted sub targets, which are determined in advance on an annual basis.

The Board of Directors determines the weighting of the performance targets and the respective target values annually in advance, and reports on this in the Remuneration Report.

Half of the variable remuneration is paid in cash, with the other half paid in shares.

For remuneration paid in shares, the number of shares is calculated based on the average market value of the Rieter share on the first ten trading days of the new financial year, minus an amount of approximately 16.0380 percent as set by the Federal Tax Administration to account for the vesting period. The restricted shares are transferred in April. The shares are restricted for a period of three years from the date of transfer. The purpose of the three-year vesting period for the allocated shares is to ensure that the share-based remuneration is aligned with the long-term growth of the enterprise value. Rieter Ltd. covers the statutory employer contributions for social security, accident and illness. Members of the Group Executive Committee also receive an annual lump-sum expense allowance.

For each sub target, a lower threshold of 0 to 50 percent, an upper threshold of 150 percent and a target value of 100 percent are defined. If the lower threshold is not reached, no payment is made for this sub target. Within the range between the target and threshold values, the variable remuneration is calculated linearly.

Special provisions

The Board of Directors has the authority to pay a maximum of three percent of the total salary of the Group Executive Committee to members of the Group Executive Committee for extraordinary individual achievements.

According to Article 29 of the Articles of Association, the company is authorized to pay additional remuneration to members of the Group Executive Committee who join the company or are promoted to the Group Executive Committee after the date on which the remuneration is approved by the annual general meeting and if the amount already approved for this period is insufficient, provided that the total amount does not exceed 40 percent of the most recently approved remuneration of the Group Executive Committee.

In the event of termination of an employment relationship, the following provisions apply to shares acquired under the RSTI:

Reason for termination

Restricted shares

Good Leaver

Retirement

Regular disposal restriction

Disability

Other reasons

Liquidation/change of control1

Immediate lifting of the disposal restriction

Death

Bad Leaver

Inadequate performance/inadequate conduct2

Regular disposal restriction

1This rule applies only if the employment contract is terminated following a change of control or liquidation (double trigger).

2For members of the Group Executive Committee, inappropriate performance or conduct is determined by the Board of Directors at its professional discretion.

Performance management

The actual remuneration paid to the members of the Group Executive Committee in a given year is based on the company’s performance and the individual achievements. The latter is assessed as part of the formal annual performance management process. Company targets and individual performance targets are set at the beginning of the financial year, and the actual results are compared with these targets at the end of the year. Actual remuneration is determined based on the performance evaluation of the company targets.

Targets (December/January)

Mid-year assessment (July)

Year-end assessment (December/January)

Determination of remuneration (February/March)

Setting of individual targets

Mid-year review of performance to date in relation to the defined targets

Self-assessment and performance evaluation

Determination of the actual variable remuneration

3.2.1 Employment contracts

Employment and mandate contracts for members of the Group Executive Committee may be concluded for a fixed term of up to 12 months or for an indefinite term with a notice period of up to 12 months. Renewal is permitted.

The agreement of a non-competition clause for the period following the termination of an employment contract is permissible. To compensate such a non-competition clause, remuneration may be paid for a maximum of two years, the annual amount of which may not exceed a total of 50 percent of the last annual remuneration paid to that member.

3.2.2 Remuneration for the 2024 financial year

The remuneration for the Group Executive Committee is reported using the accrual method as the performance-related salary components are paid out or allocated only in the following year. In the case of a new appointment to the Group Executive Committee, the remuneration is included from the date on which the member assumes the corresponding position. The same applies to departures from the company. The members of the Group Executive Committee do not receive their remuneration from Rieter Holding Ltd. but from an operating subsidiary.

No severance pay is provided for the Group Executive Committee under the regulations, and none was paid out in the 2024 financial year.

Total remuneration

The total remuneration paid to the Group Executive Committee in 2024 amounted to CHF 5 809 222 (2023: CHF 5 791 172) and was within the maximum remuneration of CHF 6 500 000 approved by the 2023 Annual General Meeting for the 2024 financial year. Of the total remuneration, CHF 2 354 500 is allocated to the base salary and CHF 2 694 018 to the variable remuneration, along with the corresponding pro rata social insurance contributions.

In the 2024 financial year, the focus remained on the implementation of the Next Level performance program, which is intended to strengthen sales excellence and customer focus, improve cost efficiency in production and optimize fixed cost structures.

Underlying key figures

2023 financial year

2024 financial year

EBIT b.r.a.i. of the Group

5.9%

3.9%

Free cash flow divided by net profit (free cash flow conversion ratio of the Group)

135.8%

EBIT b.r.a.i. margin Machines & Systems Division

– 0.9%

EBIT b.r.a.i. margin After Sales Division

17.5%

EBIT b.r.a.i. margin Components Division

3.9%

In the 2024 financial year, the average target achievement was 103.3 percent (2023: 73.8%).

3.2.3 External mandates of members of the Group Executive Committee

The following table lists all external mandates according to Art. 734e CO held during the financial year 2024 by members of the Group Executive Committee in comparable functions at other companies with an economic purpose within the meaning of Art. 626 para. 2 no. 1 CO (including companies belonging to the same group):

(Audited by KPMG)

Company name

Function

Membership in committees

Thomas Oetterli

SFS Group AG

Chairman of the Board of Directors

Swissmem

Member of the Council

Roger Albrecht

No further mandates

Serge Entleitner, until Oct. 31, 2024

Prosino s.r.l.

Member of the Board of Directors

Rico Randegger

Electro-Jet S.L.

Member of the Board of Directors

Oliver Streuli

Autoneum Holding AG

Member of the Board of Directors

Member of the Compensation, the Nomination and the Strategy and Sustainability Committee

Until March 25, 2024

Swiss Steel Holding AG

Member of the Board of Directors

Member of the Compensation Committee

The external mandates held by the members of the Group Executive Committee in the previous year are published in the 2023 Annual Report under this link on page 70.

3.2.4 Shares held by the Group Executive Committee

The following table provides information on Rieter shares held by members of the Group Executive Committee and their entitlement to shares as at December 31, 2024 and December 31, 2023:

(Audited by KPMG)

Number of shares as of December 31, 2023

Number of shares as of December 31, 2024

Thomas Oetterli1

3 005

8 304

Roger Albrecht

1 294

2 417

Serge Entleitner

2 225

3 427

Rico Randegger

1 990

2 692

Oliver Streuli

0

168

Total

8 514

17 008

1The total number of shares is listed both under the Board of Directors and the Group Executive Committee.

3.2.5 Remuneration of the Group Executive Committee

In the 2024 financial year, the total remuneration paid to the members of the Group Executive Committee amounted to CHF 5 809 222. Of this amount, CHF 2 199 022 was paid to the CEO. No remuneration was paid to former members of the Group Executive Committee. At the 2023 Annual General Meeting, the Group Executive Committee was granted a maximum total remuneration of CHF 6 500 000 for the 2024 financial year, which is within the approved limit. The total remuneration paid to members of the Group Executive Committee in the 2024 financial year comprised the following:

(Audited by KPMG)

Base salary

Cash bonus3

Share-based compen- sation3

Pension and social benefit contributions2

Total 2024

Expense allowance

CHF

Thomas Oetterli, Chief Executive Officer1

850 000

462 400

578 000

308 622

2 199 022

16 000

Other four members of the Group Executive Committee

1 504 500

946 627

706 991

452 082

3 610 200

64 000

Members of the Group Executive Committee

2 354 500

1 409 027

1 284 991

760 704

5 809 222

80 000

1Highest single remuneration

2Pension and social benefit contributions include the employer’s contributions to social insurance and pension funds, and contributions for accident and illness. Employee contributions are included in the other remuneration items.

3The variable remuneration amounts to 114.4 percent of the base salary.

The total remuneration paid to members of the Group Executive Committee in the 2023 financial year comprised the following:

(Audited by KPMG)

Base salary

Cash bonus7

Share-based compen- sation7

Pension and social benefit contributions2

Total 2023

Expense allowance

CHF

Thomas Oetterli, Chief Executive Officer1

686 986

253 498

253 498

224 933

1 418 915

12 932

Other members of the Group Executive Committee

2 378 756

838 727

465 585

689 189

4 372 257

84 822

Members of the Group Executive Committee3,4,5,6

3 065 742

1 092 225

719 083

914 122

5 791 172

97 754

1Highest single remuneration

2Pension and social benefit contributions include the employer’s contributions to social insurance and pension funds, and contributions for accident and illness. Employee contributions are included in the other remuneration items.

3Including all remuneration paid to Dr. Norbert Klapper, Chief Executive Officer, until March 12, 2023

4Including all remuneration paid to Kurt Ledermann, Chief Financial Officer, until July 31, 2023

5Including all remuneration paid to Thomas Anwander, Group General Counsel, until April 20, 2023

6Including all remuneration paid to Oliver Streuli, Chief Financial Officer, from August 1, 2023

7The variable remuneration is 73.8% of the base salary.